Chapter c 4 corporate nonliquidating distributions

Going back to our case study, if A and B simultaneously transfer property to a corporation in exchange for 50% of the corporation’s stock, Section 351 applies to the transfer.

Despite the fact that A’s building has a fair market value of

Going back to our case study, if A and B simultaneously transfer property to a corporation in exchange for 50% of the corporation’s stock, Section 351 applies to the transfer.Despite the fact that A’s building has a fair market value of $1,000,000 and a tax basis of $400,000, no gain is recognized.In addition, Section 351 allows for a group of transferors.

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Going back to our case study, if A and B simultaneously transfer property to a corporation in exchange for 50% of the corporation’s stock, Section 351 applies to the transfer.

Despite the fact that A’s building has a fair market value of $1,000,000 and a tax basis of $400,000, no gain is recognized.

In addition, Section 351 allows for a group of transferors.

If you contribute appreciated property to a corporation in exchange for, say 20% of the corporation’s stock, but simultaneous to the transfer, another two individuals transfer cash or property to the corporation in exchange for an additional 65% of the stock, all three transfers are covered by Section 351 because on a combined basis, the transferor group controls the corporation immediately after the transfer.

  Under Section 358, A takes a basis of $400,000 in the corporate stock received.

Because the total value of the corporation’s assets is $2,000,000, A’s 50% stock ownership is presumably worth $1,000,000.

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Understanding Taxation of Business Entities is new to the Lexis Nexis Understanding Series.

,000,000 and a tax basis of 0,000, no gain is recognized.

In addition, Section 351 allows for a group of transferors.

If you contribute appreciated property to a corporation in exchange for, say 20% of the corporation’s stock, but simultaneous to the transfer, another two individuals transfer cash or property to the corporation in exchange for an additional 65% of the stock, all three transfers are covered by Section 351 because on a combined basis, the transferor group controls the corporation immediately after the transfer.

  Under Section 358, A takes a basis of 0,000 in the corporate stock received.

Because the total value of the corporation’s assets is ,000,000, A’s 50% stock ownership is presumably worth

Going back to our case study, if A and B simultaneously transfer property to a corporation in exchange for 50% of the corporation’s stock, Section 351 applies to the transfer.Despite the fact that A’s building has a fair market value of $1,000,000 and a tax basis of $400,000, no gain is recognized.In addition, Section 351 allows for a group of transferors.

||

Going back to our case study, if A and B simultaneously transfer property to a corporation in exchange for 50% of the corporation’s stock, Section 351 applies to the transfer.

Despite the fact that A’s building has a fair market value of $1,000,000 and a tax basis of $400,000, no gain is recognized.

In addition, Section 351 allows for a group of transferors.

If you contribute appreciated property to a corporation in exchange for, say 20% of the corporation’s stock, but simultaneous to the transfer, another two individuals transfer cash or property to the corporation in exchange for an additional 65% of the stock, all three transfers are covered by Section 351 because on a combined basis, the transferor group controls the corporation immediately after the transfer.

  Under Section 358, A takes a basis of $400,000 in the corporate stock received.

Because the total value of the corporation’s assets is $2,000,000, A’s 50% stock ownership is presumably worth $1,000,000.

View a sample of this title using the Read Now feature To purchase a printed version of this title, please visit

Understanding Taxation of Business Entities is new to the Lexis Nexis Understanding Series.

,000,000.

View a sample of this title using the Read Now feature To purchase a printed version of this title, please visit

Understanding Taxation of Business Entities is new to the Lexis Nexis Understanding Series.

For most tax practitioners, this would elicit the following Pavolovian reaction: “You should NEVER put real estate inside a corporation.” And while there are very few NEVERS in the tax world, this one is pretty darn accurate.

The book is replete with descriptions and analyses of the relevant Internal Revenue Code and Treasury Regulations provisions, summaries of leading cases and IRS rulings, and plenty of examples that apply the law to hypothetical situations.

Understanding Taxation of Business Entities is designed primarily for law students, but it is also intended to be useful to practitioners, including generalists who need a relatively brief summary of a business entity tax topic, beginning lawyers who intend to specialize in partnership and corporate taxation and / or are working on an LL. in taxation, and experienced lawyers who wish to expand their practices into business entity taxation.

First, you don’t have to acquire 80% of the corporation; you simply must own 80% immediately after.

A taxpayer who already owns say, 85% of a corporation may continue to transfer appreciated property to the corporation, and the gain will be deferred under Section 351.

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Under Section 358, you must take a basis in the stock received equal to the basis in the property you transferred to the corporation.

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